Further enhancements to the Income Tax Return for Companies (ITR14)

SARS introduced enhancements to the Income Tax Return for Companies (ITR14) on 9 December 2016.

Only the new return will be accepted after 9 December 2016 and where a taxpayer has captured and saved an ITR14 prior to Friday 9 December 2016, the taxpayer would need to open the return which will then be replaced with a new ITR14 return based on the rules applicable for that year of assessment. ]

Changes to the ITR14

Legal enhancements:

• For the year of assessment (YOA) commencing on or after 1 January 2016, foreign tax credits cannot be claimed as a rebate in terms of section 6quin due to the fact that this section has been repealed. However, taxpayers can now claim this type of foreign tax credit as a deduction in terms of section 6quat (1C).
• As from 1 March 2016, all qualifying companies operating within a Special Economic Zones (SEZ) will be taxed at a rate of 15% which is lower than the current corporate tax rate of 28%.
• A question has been added on the return wizard for a company to indicate if it has changed its residency status and if it has, from what date.

Return enhancements:

• Dormant companies: The “Dormant Company Details” container now makes provision for dormant companies carrying on the activities of a nominee to declare taxable passive income received or accrued. Please note that it is a legal requirement to submit a tax return even if the company is dormant.
• The ITR14 return now has an option to indicate if the financial year end of the company changed during the relevant year of assessment.
• The containers for Local and Foreign Capital Gains and Losses now make provision for a new line item with a new source code for the “claw back” provisions in terms of section 45(5).
• A new field has been added to the “Non-Residency” container to indicate the date on which the company ceased to be a resident if applicable.
• IRP5 data will be pre-populated and locked. If you have more than twenty IRP5’s the twentieth one will not be locked, you can make changes on it.